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Revenue Management Midterm (Quiz Questions)
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Update 20 25
Pace of build refers to: a) How quickly new hotel rooms and new hotels are being added to a comp set's total supply b) The rate at which reservations are being made for a future date c) How quickly the demand for substitute products is reducing demand for hotel rooms d) The speed with which currency exchange rates are rising in a given market - โโb Denial reports from reservations show us how much more business we could captured if we had additional capacity or inventory. Since there was more demand than supply, we need to asses whether our rates were too low for that time period. A denial occurs when:
a) Business that had considered an organization's products or services, but in the end decided to purchase from another organization b) Certain "rules" or "criteria" that are put in place to govern the conditions and availability of a rate are not available c) A facility is not able to accommodate a guest due to unavailability of product or service at that price d) A facility has the product of service available, but the customer chooses not to buy based upon the price or some other factor - โโc In a property forecasted high period of demand period, if the RM displacement analysis shows that by accepting a certain group the overall net revenue gain is positive (more revenues than the costs of displacement transient demand in the future), increasing profitability, than its Sales or Reservations departments should be inclined to: a) All of the above apply b) Decline the group reservation c) Regret the group reservation
Which of these statements is fully correct? a) Businesses that serve international customers must monitor currency exchange rates b) Businesses that serve international customers must monitor hotels failure rate c) Businesses that serve international customers must monitor similar products d) Businesses that serve international customers must monitor employment rates
- โโa Which forecasts are less detailed and accurate? a) strategic forecast b) all of the above c) tactical forecast d) operational forecast - โโa
Nonphysical Price Fences, strategic controls or also commonly called Rates with "Fenced" Discounts e.g. Minimum Length of Stay (MLS) are: a) Tactical system controls to be deployed to control rate and room type b) Devices used to slow down customer turnover c) "Rules" or "criteria" or "conditions" that are put in place to govern the conditions and availability of a rate d) "Rules" or "regulations" that are used to target different market segments - โโc After customers have met their basic financial requirements, any remaining money is considered what? a) nominal income b) constrained income c) disposable income d)discretionary income - โโd
b) capacity allocation c) closed to arrival (CTA) d) business group e) rate threshold - โโd A contains a breakdown of all revenue and expenses reasonably planned and expected for a particular period and is not likely to change unless unforeseen events force a revision. a) budget b) market c) forecast d) revenue management tactic - โโa Melissa called the High Demand Hotel on Wednesday to make a weekend reservation. The reservation agent checked the computer and then politely told
Melissa that the hotel was sold out and they wouldn't be able to provide her with a room. What type of guest would Melissa be classified as?a) denial b) undesirable c) unconstrained d) regret - โโa What is true about a revenue manager's rooms demand forecast? a) It is based on the total number of hotels in an area b) It is based on customer demand at an established price c) It cannot be altered in the future via price management strategies d) It is based on customer demand at a yet to be determined price - โโb What is the booking pace? a) It's all of the above b) An indicator that compares the revenue pace of the current year with those of previous years
a) 2% b) 3% c) 4% d) 1% - โโb What is not part of the results or goals of tactical discounting? a) It can attract brand-neutral, price-sensitive guests b) Increases your property revenues, RevPAR and profitability c) It can increase occupancy and grow market share d) It can generate cash flow in the short run - โโb What does up-selling ideally accomplish? a) increase margins b) satisfy guests c) all of the above
d) increase revenues - โโc A revenue manager notices that the hotel is filling up rapidly for a future date. In response, she decides to close a discount level for that day. This is an example of: a) a stay-sensitive hurdle rate b) demand-based dynamic pricing c) up-selling d) using a flexible rack rate - โโb Which of the following rate types is NOT a common rate type? a) rack rate b) government rate c) corporate rate d) complimentary rate e) continental rate - โโe
b) ADR and rack rate c) occupancy and hurdle rate d) occupancy and ADR - โโb Which are the rates which always apply to membership organizations? a) group rates b) government rates c) promotional rates d) event rates e) rack rates - โโc What type of traditional market segmentation is often identified by postal code? a) geographic b) psychographic c) behavioral
d) demographic - โโa Which of the following is NOT another term for the rack rate? a) premium rate b) posted rate c) hurdle rate d) walk-in rate - โโc What is the lodging industry term for the situation that occurs when a hotel is unable to accommodate a guest's reservation preference due to the unavailability of the room or service at the price, or on the date, originally requested by the guest? a) block (reservation) b) denied (reservation) c) fenced (reservation) d) tacked (reservation) - โโb
d) hotel a exceeded its fair share - โโd Gross operating profit per available room equals the gross operating profit for a period divided by the? a) available rooms in the market set during that period b) available rooms during that period c) number of rooms sold in the market during that period d) number of rooms sold during that period - โโb Total rooms available divided by the number of rooms occupied is known as: a) rack rate b) average daily rate c) RevPAR d) room occupancy percentage - โโd
If room revenue is $75,884 and the total number of rooms sold is 662, then Average Daily Rate is: - โโ$114. If the total rooms occupied are 662 and the total rooms available are 850 then the room occupancy percentage is: - โโ73.2% Many market intelligence services and reports are available to study hotels comp sets. Which one is NOT often used to monitor the progress of the marketplace? - โโopen table Room Occupancy percentage or ROP is: a) total rooms occupied divided by total available rooms b) room revenue divided by number of rooms sold c) room cost divided by room sales d) total rooms available divided by number of rooms sold - โโa
A given hotel's comp set should contain all other hotels: a) that have similar pricing structures b) that fall within a relevant geographic area c) that compete for the same guests or market segments d) that have widely recognized brand affiliations - โโc Room Revenue/ number of rooms sold: - โโADR If a 300 - room hotel achieves 70% occupancy for April at an ADR of $153 per room, what will room revenue equal? (occupancy x ADR) - โโ$963, To interpret measures of a hotel's performance, managers often compare those measures with: a) the budget for the period b) industry or sector averages
c) historical figures from comparable earlier periods at the hotel d) all the above - โโd Doing business evaluations and choosing between different sales requests it's a complex process because of many reasons. Which of the following statements about competitive sets is FALSE? a) different products and different market segments mix b) perishable products (typ 1 day shelf life) c) competitive sets incur into very different costs per room sold d) competitive sets have different margins and sales within a limited inventor - โโc Measuring the effectiveness of a revenue management system is: a) a common feature of automated revenue management systems b) mathematically simple when historical data is available for comparison c) difficult because the causes of measurable changes may not be clear
